3) Imagine that you have been awarded a book deal by a major publisher which includes a $250,000 advance. If you invest this money in U.S. Treasury Bills at 2% interest, how much money will you have after 10 years?

Here's what I have...Right track or no?
- A=250,000(1+0.02/12)^12(10)
- A=250,000(1.00167)^120
- A=250,000(1.22119943)
- A=204,716.768+250,000
A=$454,716.768?

Question

3)	Imagine that you have been awarded a book deal by a major publisher which includes a $250,000 advance. If you invest this money in U.S. Treasury Bills at 2% interest, how much money will you have after 10 years?

Here's what I have...Right track or no?
-	A=250,000(1+0.02/12)^12(10)
-	A=250,000(1.00167)^120
-	A=250,000(1.22119943)
-	A=204,716.768+250,000
A=$454,716.768?

anonymous · Answer

I see one tiny mistake. I think you have assumed the interest to be compounded monthly. Normally it is compounded annually. This would reduce your fraction in the first step to 10 instead of $$ 10 \times 12 $$

anonymous · Answer

Also, at the end do not add the 250000 again. It has already been taken care of in the formula. Although, 250,000(1.22119943) is not equal to 204,716.768

anonymous · Answer

305,299.858 is how much money I would have after 10 years...and that is including the 250,000

anonymous · Answer

Please can someone confirm this?

anonymous · Answer

That seems correct.